ChasNote

Great article about the evolution of digital brand marketing at Ad Age:

“The inconvenient truth is that for all its new-media spin, display advertising is ‘old’ media — a commercial message to be placed next to editorial or entertainment content. And we know by now that measured-media growth has pretty much ground to a halt as marketers continue to increase their dollars in unmeasured disciplines such as web development, public relations and database marketing at the expense of paid advertising. Ad spending among the top 100 U.S. advertisers last year grew a paltry 1.7%, with measured media only up 0.3%. Measured-media spending is in decline in Japan, and it’s not much better in the U.K.”

AdAge is launching a series of articles tracking the efforts of America’s 1,437 daily newspapers as they attempt to get their mojo (and revenues) back. The grim math by Annenberg’s Jeffrey Cole goes like this:

“‘When an offline reader of a paper dies, he or she is not being replaced by a new reader,’ he said. ‘How much time do they have? We think they have 20 to 25 years.’”

The series will also watch what the Project for Excellence in Journalism calls “decoupling of news and advertising.”

Here’s Battelle from a piece he contributed to American Express’s blog on the decoupling of content creation from advertising, about a month before the piece by the Project for Excellence in Journalism.

Nielsen numbers analyzed by Ad Age suggest that consumer do prefer green brands, products and services, but that brands that push too hard on the theme — GE and Starbucks are called out — invite scrutiny that may bring with it an online backlash.

Avenue A’s senior VP for global media isn’t worried about Microsoft buying Yahoo. Or, as the Silicon Alley Insider headline puts it, “Microsoft + Yahoo = Irrelevant.”

“”There’s a perspective that going from three portals to two is bad for buyers. But spend is actually moving away from portals and much more broadly across the web, so I’m actually not concerned about moving from three to two, because we are really moving from 3 to 800.”

More at Ad Age:

“For the first time in the past four years, portals lost share of ad dollars year over year — at least from Avenue A/Razorfish, which releases its latest Digital Outlook report today. The shift comes after years of ad-dollar consolidation with the largest players online. In 2007, 19% of Avenue A’s media spending went to portals, down from 24% in 2006.”

Last fall JCPenney worked with FM on the creation of a Fall Shopping Guide site — an aggregate website of ten leading online voices and publications that cater to upscale women. Instead of ad banners driving traffic to a standard marketing site, JCPenney sponsored editorial content, promoted it with banners featuring content headlines, and invited visitors to join the conversation by submitting comments.

The approach delivered strong results. Not just better click-through rates. The sponsorship sparked customer engagement that positively affected JCPenney’s “organic search equity,” the status of the brand among the natural, unpaid results on search engines. As Abbey Klaassen describes it in her Ad Age article on the JCPenney campaign:

“Yes, search equity is all about link love. Creating — or aggregating — compelling content online and letting readers use social-media tools to share the content can goose Google results for brand or related terms. It’s something bloggers have known for years, but marketers are really just beginning to employ.”

Here’s my original write-up at ChasNote.

Talk about stating the obvious! But a glance at the charts in Ad Age’s Annual 2008 report got me thinking that it may not be obvious to some of the biggest players in the industry. For those of you looking at the print edition, I’m on Page 10: The top brands in various categories ranked by ad spend and share of sales in their respective markets.

Advertising among the Detroit automakers in 2007 was, it appears, a defensive operation at best. GM spent $2.2 billion in media as their marketshare slipped to 24.5% from 26.2%. Ford spent $1.7 billion only to see their share decline to 17.5% from 18.6%. Toyota invested $1.2 billion in ads — less than GM or Ford — and grew share to 15.4% from 13.3%. Honda increased share by half a percentage point (9.1% from 8.6%) on an ad budget that was less than $1 billion.

Of course it’s hard to isolate the precise cause from among the many possibilities — product offerings; oil at $100 a barrel; the mix of media spending across print, TV and digital; creative messaging; dealer incentives; etc. Across the categories data-fied in Ad Age’s report, I couldn’t find a consistent correlation between marketing spend alone and sales performance. Both Walmart and JCPenney spent nearly half a billion dollars to hold steady their marketshare (Walmart at 10.6%, JCPenney at 0.8%). Dunkin Donuts spent $108 million to boost share by a tenth of a percent (1.3% from 1.2%), while McDonalds spent $776 million to lose a tenth of a percent (7.7% from 7.8%) in the same category.

Among brands that held 10% or more of their markets in 2005, only Toyota, American Express, and all for big wireless players (AT&T, Verizon, Sprint and T-Mobile) increased share in 2007. It suggests that innovation — which I’m defining here as investments of any kind that pay higher dividends for one company than similar investments by competitors — is most active among the underdogs. Surprise, surprise. But perhaps there’s a lesson for the big dogs: If what you did last year and the year before isn’t working, try something new.

A recent McKinsey report (see Business Week) suggests one thing isn’t working so well: “Traditional TV advertising will be one-third as effective in 2010 as it was in 1990.”

That’s the headline for Greg Jarboe’s column today at Search Engine Watch. I worked with Greg at Ziff-Davis in the mid 1990s and was at CMP before that, so it’s sad to see the group tombstone for the trade magazines that have gone under in recent years.

The good news is that the readers of those magazines did not suffer the same plight. They’ve just gone online and, in most cases, filled their informational needs with leading business blogs for their industry.

“According to Compete, 382,749 people visited Search Engine Watch in November 2007; 342,970 visited Search Engine Land; 278,014 visited WebProNews; 139,914 visited Marketing Pilgrim; 77,085 visited Search Engine Roundtable; and 32,398 visited Search Newz.

“This puts them in the same ballpark as the circulation of print publications: 440,000 for InformationWeek; 400,100 for eWeek; 58,979 for Advertising Age; and 23,152 for AdWeek.

“More to the point, the number of visitors to the online publications and group blogs covering the search industry is in the same ballpark as the number of visitors to the websites of trade publications in the technology or advertising industries.

“According to Compete, 424,773 people visited InformationWeek.com in November 2007; 331,060 visited eWeek.com; 213,900 visited AdAge.com; and 101,140 visited AdWeek.com.”

Last Friday at Butler Shine’s Influx Ideas conference, Jonah Bloom presented his take on the future of advertising. One point in particular resonated for me (among many, many interesting points): A generation ago, there was no such thing as an industry serving our personal storage needs. In 2006, storing the stuff we don’t use is a $23 billion business in the US alone.

There are two ways to make sense of this development. One, an extrapolation of Barbara Ehrenreich’s argument in Nickel and Dimed, would be that housing costs have inflated more quickly than the rest of the stuff that goes in the house — so we all have more stuff than house to keep it in. Or two, Bloom’s perspective, is that our material needs in this country are more than fulfilled, we literally have more goods than we need or use. (I’m guessing both would agree that the non-material needs of the US population — say affordable health care or good public schools — are yet a long way from fulfillment for most.)

To an audience of marketers and agency folks, Bloom’s message was pointed. Successful brands need to move beyond pitching their products and services as goods to fulfill existing customer needs — the rational, direct-response side of marketing. They need to move into the emotional arena of creating “wants” that their brands fulfill. The desire, say, to be seen as hip or fashionable or smart or innovative. In West Coast media circles, this demand-creation concept is often dismissed as irrational, and the people who encourage it (brand marketing departments, agency execs, publishers and, of course, New Yorkers) as the “friction” that technology should eliminate.

I wonder what Starbucks, with their $4 lattes, and Porsche, with VW parts hiding beneath a premium brand and price tag, would say to a future of advertising based on rational thinking?